AI Back-end Switch Sales to Approach $1 Trillion over the Next Five Years, According to Dell'Oro Group
Scale-up Networking to Account for More than Half of the Market by 2030
REDWOOD CITY, Calif., July 28, 2026 /PRNewswire/ -- According to a recently published report from Dell'Oro Group, the trusted source for market information about the telecommunications, security, networks, and data center industries, cumulative spending on data center switches deployed in AI back-end networks to support next generation AI infrastructure is forecast to approach $1 trillion over the next five years (2026-2030). Scale-up is projected to account for more than half of the market by 2030.
"The unprecedented pace of investment in accelerated computing to support the next wave of AI journey —driven by agentic and physical AI applications— is fueling a rapid expansion of the AI networking market, including scale-up, scale-out, and scale-across," said Sameh Boujelbene, Vice President at Dell'Oro Group. "We have substantially raised our revenue and port-shipment forecasts since our January 2026 outlook to reflect both stronger demand for accelerated compute and higher infrastructure costs. Despite this significant upward revision, we believe the market will remain supply-constrained rather than demand-constrained over our five-year forecast horizon."
"Scale-up networking will account for more than half of the AI back-end switch market by 2030 and will more than double the total addressable market for switches deployed in AI back-end networks. Although NVLink currently dominates scale-up deployments, Ethernet and UALink are gaining momentum as hyperscalers and other operators deploy custom and merchant accelerators beyond NVIDIA's GPUs. We expect Ethernet to become the leading scale-up technology by the end of the decade and to remain the long-term leader across the broader AI back-end networking market, including scale-up, scale-out, and scale-across," continued Boujelbene.
Additional highlights from the Data Center Switch – AI Back-end Networks Report:
- We expect the ramp of 1.6 Tbps to be at least five times faster than that of 800 Gbps, driven by increased AI infrastructure scale and a broader adoption across scale-up, scale-out, and scale-across networks. The pace of adoption and shipment growth is expected to accelerate further with the transition to 3.2 Tbps.
- Advanced pluggables, XPO, NPO, and CPO will coexist, with XPO and NPO gaining earlier momentum and CPO ramping up over time as the technology and supply chain mature.
- Despite Ethernet dominance, multiple networking technologies and architectures will coexist, creating multibillion-dollar opportunities as operators balance accelerator platforms, performance requirements, scale, and ecosystem preferences.
Dell'Oro Group's Data Center Switch – AI Back-end Networks Forecast Report provides an in-depth look at switches deployed in AI back-end networks to connect accelerated servers. The report contains in-depth market information on scale-up, scale-out, and scale-across technologies and use cases, as well as the choices made by various hyperscalers. It also covers revenue split by various regions and various customer segments — including the Top 4 US Cloud, Top 3 China Cloud, Neocloud, AI Model Builders, and Large Enterprises. For more information about the report, please contact us at [email protected].
Dell'Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, security, enterprise networks, and data center infrastructure markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell'Oro Group at +1.650.622.9400 or visit https://www.delloro.com.
SOURCE Dell'Oro Group
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